Countrywide Financial co-founder Angelo Mozilo is back in the news today – thanks to the public release of a 2010 deposition he gave tied to an MBS civil fraud case brought by MBIA. In that legal document Mozilo boasted that he had “no regrets” about how he managed CFC. He also said he settled a civil fraud case with the Securities and Exchange Commission ($67.5 million) to protect his children. (Sounds like the Angelo we knew, indeed.) But prior to his fall from grace he was one of the most respected mortgage bankers in the nation, someone who loved to compete at all costs. Which brings me today’s market. Mozilo once boasted to me that in a refi boom CFC could out lend anyone – in volume and turn times. But he also knew that refi booms (we’re still in one today) also bring out reckless behavior on the part of lenders -- and usually end with a nasty hangover. (Mozilo referred to refi booms as an ‘Idiot’s Market’ which meant that if you’re a mortgage banker losing money in a refi boom you must be an idiot.) What do mortgage bankers do when refis end? We should know in about 12 months.
